Following the publication of terms of reference last month (discussed here), the open banking inquiry has released an issues paper which sets out the scope of its review. The issues paper discusses the background to the inquiry, the nature of open banking (including costs and benefits) and how other key jurisdictions are progressing their regulations, with the issues paper noting that the UK, EU, US, Singapore and Japan have adopted or are progressing open banking frameworks. Key topics addressed in the issues paper include:
- what data should be shared and between whom: the issues paper notes that key topics to be resolved include determining what data sets should be shared based on which promise the largest net benefit to customers and the community, who should be required to share data (including whether compliance would be disproportionately burdensome on smaller banks), who should have the right to direct that data be transferred (for instance, whether small businesses should have such a right) and determining which third parties should have access to the data.
- how data should be shared: the inquiry will consider whether to adopt specific data transfer standards and the best model for such standards noting that such standards would need to be sufficiently flexible to accommodate future innovation and broad participation, while not acting as barriers to entry. The inquiry will also consider how to inform customers of the terms of access and use of their shared data.
- how to ensure data is secure: a shared data framework increases risks that unauthorised access could lead to financial loss with the inquiry considering what controls will need to be used to manage risks in the release and sharing of data, data collection and storage. This will extend to examining a scheme for determining and apportioning liability for data breaches, providing for redress and compensation, the nature of any privacy safeguard mechanisms and determining a mechanism to provide for the enforcement of consumer rights when data sharing.
- the appropriate regulatory framework: the inquiry will consider how the appropriate regulatory framework for an open banking regime should operate. The issues paper notes the regulatory framework will need to create a broader consumer right that balances economy-wide standardisation and industry-level adaptation. While the ACCC had been proposed as the appropriate regulator, the inquiry will consider alternative regulatory models (such as licensing conditions and industry-specific legislation).
- implementation: a roadmap and timeframe will also be considered by the inquiry in which to develop the regulatory architecture to support an open banking regime. The appropriate model to fund the operation of the open banking regime may also be considered by the inquiry.
The inquiry is seeking submissions on the issues paper by 22 September 2017.